Fed Beige Book: Modest Economic Expansion

The Federal Reserve's Beige Book today indicated that economic activity in the 12 Federal Reserve districts generally expanded modestly since the last report. "The New York District noted a leveling off in economic activity, and Kansas City indicated some slowing in the pace of growth. In general, other Districts reported that growth continued at a modest pace," according to the document summary.

Consumer spending was generally flat to slightly higher since the last report. Residential real estate conditions were improved since the last report, while manufacturing sector conditions were mixed, bug also somewhat improved from the last report.

Districts mostly reported little change in prices of both finished goods and inputs. Prices for agricultural commodities and petroleum-based products were generally reported to be higher, while natural gas prices were said to be low or declining. Employment conditions were little changed since the last report. Several Districts continued to report shortages of highly skilled workers, but otherwise wage pressures remained modest. Philadelphia, Cleveland, and Chicago noted increases in the costs of employee medical benefits.

The Beige book showed mixed agriculture conditions since the last report. According to the report summary, "Drought conditions continued to hurt the agriculture sector in the Chicago District, parts of the Minneapolis District, and the Kansas City and Dallas Districts. However, agriculture activity was reported as higher in the Atlanta and St. Louis Districts, as well as in parts of the Minneapolis District, and was reported as stable in the San Francisco District. The Chicago and Dallas Districts noted that increased rainfall had improved crop conditions. In the Dallas District, crops were reported to be mostly in fair to good shape, with production levels ahead of last year but below average due to ongoing dry conditions. Producers in the St. Louis District reported that crops were generally in better condition than at the time of the previous report, and harvest rates for corn and rice were well ahead of their five-year averages. Contacts in the Atlanta District reported that the rise in some crop prices related to the drought in the Midwest led to an increase in crop production in the Southeast."

Higher feed prices continued to adversely affect livestock producers in the Atlanta, Chicago, Minneapolis, Dallas and San Francisco Districts, though the Chicago District noted some easing in higher feed prices which provided a bit of relief, according to the Beige Book.